GBU-12 bombs (along with the balance of the Paveway series) are produced by defense contractorsLockheed Martin and Raytheon. Raytheon began production after purchasing the product line from Texas Instruments. Lockheed Martin was awarded a contract to compete with Raytheon when there was a break in production caused by transferring manufacturing out of Texas. "Paveway II" refers specifically to the guidance kit, rather than to the weapon itself. See also GBU-16 Paveway II, where the same guidance unit is fitted to a Mk 83 1,000-lb bomb.

The US Department of Defense has upgraded GBU-12 production versions to include GPS guidance modes. Lockheed Martin is the sole source for US Navy purchases of this version. Raytheon sells upgraded GBU-12s to the US Government and other nations. Raytheon production of the GBU-12 is centered in Arizona, Texas, and New Mexico. Lockheed Martin production is centered in Pennsylvania.

Paveway II laser-guided bombs use what is known as "bang bang" guidance. This means the bomb's fins deflect fully, rather than proportionally when it is attempting to guide to the laser spot. For example, if it sees the laser spot and determines that it should make a change it deflects its fins until it has over-corrected and then it deflects back the opposite direction, creating a sinusoidal type of flight path. This type of guidance may be less efficient at times.